Report: 40 percent of Illinois small businesses behind on November rent
A new survey found 40% of Illinois’ small businesses were unable to pay rent on time or in full during November, up 8 percentage points from October as the state’s most prolific job creators grappled with higher rent prices, inflation and reduced consumer spending.
Illinois small businesses reported the third-largest monthly increase in rent delinquency and sixth-highest rate overall among states. Illinois was slightly below the U.S. average of 41% in November, which was the highest rent delinquency rate of 2022.
Alignable’s monthly business survey said 73% of small businesses nationwide reported less customer spending in November with more than half seeing their rent increase – both up from the month prior.
Alignable head researcher Chuck Casto said months of high inflation appear to be driving up delinquency rates.
“It’s so high, and every month it is harder and harder for small businesses to pass along the price increases they need to pass along,” Casto told the Center Square.
The survey found 60% of respondents cited inflationary costs as significantly impacting their business operations. Moreover, just 14% reported earning as much or more than before the pandemic – the lowest rate on record.
Commercial property tax rates in Illinois are projected to increase $1.8 billion during the next four years based on recent increases. Those tax hikes are factored into rent by landlords, only making it harder for job creators to keep up on payments.
Illinois businesses already face challenges from the nation’s third-highest number of regulations and the potential for a recession. The Tax Foundation’s state business tax climate ranking recently showed Illinois dropped 7 places in five years as neighboring states rose or held steady. It noted high property tax rates and unemployment insurance rates were a drag on the state economy.
Commercial properties are not the only ones facing property tax increases. Homeowners also face hikes. All told, Illinois is expected to see an extra $4 billion in property taxes by 2026, with homeowners paying half of that.
If property tax rates simply continue to increase at their long-run average rate, the typical homeowner will pay over $2,100 in additional property taxes during the next four years. These Illinoisans are already paying the nation’s second-highest property taxes, which are double the nation’s average.
State lawmakers can blunt the economic headwinds facing businesses and homeowners by making property tax relief a priority.
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